STAFF TURNOVER is expected to cost Australian businesses more than $100 billion over the coming 12 months, information services company Unisys has predicted.
“It costs more to continually replace staff, and in a tight labour market each new hire drives up wage levels for the same job role without a corresponding increase in productivity,” said Steve Parker, managing director of Unisys Australia and New Zealand.
“When good staff leave intellectual property and the valuable relationships they established with customers and business partners go with them. All indications are that this will get worse in 2008.”
A Unisys analysis found the cost of replacing a worker is around 1.5 times that person’s yearly salary. Based on latest ABS figures, 1.2 million people changed jobs in the 12 months to February 2006.
Using average weekly earnings, this ends up costing the Australian economy more than $100 billion a year. A study by the Australian Chamber of Commerce also found that 70 per cent of businesses are concerned about wage levels increasing without a corresponding increase in productivity.
Australia has the lowest level of unemployment in more than 33 years, around 21 per cent of Australians have a Bachelor degree or higher and almost one in five aren’t in a traditional full-time role, he added.
“In other words, employees are qualified, they are getting younger, they are on the move and they don’t expect to stay with the same employer for the life of their career,” he said.
“Now is the time for businesses to examine their employees’ needs and expectations in order to create an environment to retain, not just attract, the right staff. Once they’ve joined the company, you need to be able to offer career development through training, experience and exposure to the challenges and opportunities that excite them. The employer needs to take an active role.”
Instead of offering potential staff champagne and iPods when they join, as some firms are reported to be doing, Parker said Australian businesses need robust talent management programs which will nurture staff, provide the right long-term rewards and show workers a real career path.
Unisys has tackled the problem of keeping good staff through a talent management program which began in Australia and New Zealand in 2003–04, and has since expanded throughout Asia-Pacific. The program is designed to accelerate the readiness of the region’s high potential individuals by ensuring they are identified and then developed and prepared to step into senior leadership roles within Unisys.
Two of the three streams of the program – Future Leader and Emerging Leader – also include a management certification from Macquarie Graduate School of Management. To date, 46 employees across the region have completed the program.
A healthy work-life balance is equally important for creating employee engagement, according to Parker.
“This encompasses far more than merely how many hours you spend in the office. It also requires a combination of physical and emotional wellbeing,” he said.
The annual productivity cost attributed to obesity is estimated to be $1.7 billion, highlighting the direct benefit for businesses ensuring they have a healthy and productive workforce.